St. Louis Lambert International Airport v Gateway Airport Partners - - PowerPoint PPT Presentation
St. Louis Lambert International Airport v Gateway Airport Partners 0 o 0 g 0 . l o 0 a m + i 26 November 2019 t n - 7 s e 5 i d u : i 9 o f n 1 l t o : s 5 C @ 1 m 6 1 n - i 1 v r 0 a - g 0 2
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26 November 2019
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01 Introduction 2 02 Airport Management Experience 10 03 Specific Topics 15 04 Driving Value at STL 21 05 Financial Capability 26 06 Engaging in the STL Process 29 07 Our Offering 31 08 Questions and Answers 33
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Dan Rossetti Director, OTPP Ashley Munroe Principal, OTPP Michael Johansson Snr Operations Manager, CAI Will MacDonald Senior Vice President, Macquarie Capital David Stanton Managing Director, OAIL
Over 10 years of experience at OTPP after joining in 2009, with a focus on transportation infrastructure
Led OTPP’s acquisition of the Chicago Skyway
Sits on the boards of GCT Global Container Terminals and Sydney Desalination Plant
Held asset management responsibility between 2009- 2012 for OTPP’s investment into Bristol Airport
Joined OTPP in 2015 and has over seven years of global infrastructure investing and asset management experience
Worked on OTPP’s acquisition of London City Airport in 2016
Asset management responsibility for GCT Global Container Terminals.
Over 25 years of global experience in aviation strategy, finance and
for Birmingham Airport, London City Airport and Copenhagen Airport. Deputy Chairman at Copenhagen Airport, as well as Chairman
Committee
Chairman of the Health & Safety Committee at London City Airport. Previously a Board Member of Bristol and Brussels Airports as well as High Speed 1
35 years experience in the airline and airport industry
Broad experience across strategic airport projects, including:
— Capacity assessments
and planning
— Terminal operation and
development
— Terminal operational
requirements
— Project management
Recent projects include: ASUR Masterplan, CUN T4 Project Management, MDE expansion planning
Over 10 years experience at Macquarie after joining in 2008, with a focus on transport and infrastructure.
Advised Sydney Airport (SYD:ASX) in relation to numerous M&A and financing transactions.
Further airport financial advisory experience in relation to: BRU, CPH, MEL, PER, ATH, OOL, DUS, HAM.
Recent infrastructure financial advisory experience in relation to the Long Beach Container Terminal and 407 ETR Toll Road
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Gateway Airport Partners is a highly integrated team comprising a best-in-class airport investor, investment manager, operator and developer with unrivalled global experience
OTPP have invested in airports since
2001 and understand
— Airport operations and risks — Long term view is required through
aviation industry cycles
OAIL has significant expertise
— Successfully managing airports — Working closely with local and
national governments, management teams, partners and other stakeholders.
— Actively ensuring achievable
strategies are pursued across OTPP’s airport portfolio
CAI has consultancy expertise
— Adding value to airports globally — Can draw on CPH - one of the most
respected airports in the world in terms of efficiency, route development and retail
We have all had experience working
together across multiple airports (CPH, BRS, BRU, BRX, LCY) and will bring this experience to improve STL
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OTPP is one of the world’s largest pension plan managers with net assets in excess of C$201.4 billion (~$150 billion) invested across a mix of equities, bonds, commodities, real estate, infrastructure and absolute return strategies
Who we ARE Investment Strategy
EQUITY ($65B)
Public and private equities aim to deliver long-term investment growth and value-added performance
INFLATION SENSITIVE ($27B)
Contributes to both diversification and protection against unexpectedly high inflation
CREDIT ($15B)
Corporate and emerging market debt investments to capture a set of risk premiums
FIXED INCOME ($78B)
Provides security and steady income, hedges against interest rate risks inherent in the plan’s liabilities and stabilizes total returns
Proven stewards of infrastructure critical to communities in which we operate
Very experienced infrastructure investor with a long history
— We have managed through market peaks and troughs — We have learned from these experiences
We have supported assets with equity when required to maximize long term value
Our money comes from the teachers of Ontario
— Long term investment horizon consistent with our
teachers’ long-term retirement obligations
Diversity and Inclusion are core to our values
— Member of the 30% Club Canada Who we ARE NOT
We are not a short term closed end fund
— We will partner with you for the long term — We don’t have a 7-10 year investment horizon — We don’t have maximum hold periods
There is no uncertainty as to where our money comes from
— No politically sensitive LPs — No headline risk
REAL ASSETS ($50B)
Real estate and Infrastructure investments provide a hedge against paying inflation- adjusted pensions
OTPP Asset Classes
Target Size
Typically up to C$1 billion, with the ability to go larger for the right
Willing to partner or purchase up to 100% equity ownership Governance
Governance and oversight to protect value
Engagement with local communities and other stakeholders Patient Capital
Long-term to permanent
Immediate cash yield not required Partnership Philosophy
Seek partners that are aligned
Local partners can be important in new geographies
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Ontario Airports Investments Limited is OTPP’s dedicated airport asset management company
In 2011 OTPP acquired OAIL as part of its acquisition of Brussels
and Copenhagen Airports. OAIL is managed by highly experienced airport executives, with over 50 years combined aviation experience
— OAIL is a wholly controlled subsidiary of OTPP — Extensive experience working with management of
international airports – active on Boards / sub committees and regular contact with management
— Active participants / leaders on all strategic, financing, risk
management and talent management activities
— Actively facilitate best practices sharing and benchmarking
across portfolio companies, where sensible
OTPP has significant and long-standing experience of investing in
the Airport Sector since 2001
Since the initial airport investment, OTPP has owned directly a
number of airports across the globe, including Birmingham, Bristol, Brussels, Copenhagen, Rome (via MAG), and Sydney Airports
Currently OTPP holds joint controlling or co-controlling stakes at
five airports: Birmingham, Bristol, London City, Brussels, and Copenhagen airports
OAIL Management Approach Overview
Monitor business performance Frequent contact with all stakeholders Facilitate identification and sharing of best practices across OTPP’s Airport portfolio Support and challenge business strategy, finance,
management decisions Influence through formal committees, working groups and informal discussions Provide asset management services
Airport investments, reporting to the OAIL Board
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Project Description
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ASUR is a Mexican airport group operating 9 airports in Mexico, 6 Airports in Colombia, and San Juan Airport in Puerto Rico. CAI had an Equity stake in ASUR from 1999 – 2010
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Since 2010, CAI has provided ongoing management and
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Since 2015, CAI has been the operating partner to IGA, the consortium responsible for the construction and operation of the New Istanbul Airport (“IGA”)
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IGA commenced full operations in April 2019. CAI continues to provide operational and management support
Copenhagen Airports International provides world class expertise in airport development and operation
Source: Company Information
CAI is an accomplished airport operator with industry-leading
management level operating experience and expertise
CAI is a wholly owned subsidiary of Copenhagen Airports A/S (CPH)
— OTPP retains a 30% equity stake in Copenhagen Airports A/S
Copenhagen Airport is the direct owner and operator of Copenhagen
Airport and Roskilde Airport in Denmark
— Extensive experience operating and managing facility
maintenance and repair
— Service delivery via excellent airline and stakeholder co-operation — Award-winning expertise in facilitating airport passenger growth
via route development and marketing, increased facility utilization and best-in-class passenger travel experience
Global Operational and Advisory Assignments
— Focused on long term engagements to assist airport owners in the
development and implementation of strategic plans since 1996
— Demonstrated track record of entering into operating contracts
with airports globally to deliver upon business strategies designed to improve airport operations
— 25+ operational and advisory assignments completed over the last
five years
— Core team of professionals with worldwide airport management
and advisory experience (supported by world class specialists within Copenhagen Airports A/S)
CAI Select Awards Overview
ASUR, Mexico New Istanbul Airport, Turkey
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Cancun, multiple winner of Best airport, Caribbean and Latin America, 2009 – 2012, ASQ
airport, UK 2010, 2011, 2012
"Passenger Evaluation Campaign" for airports with 4-10 million passengers 2002, 2003, 2004,
Select Projects
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Cadillac Fairview is a strategic real estate advisor that is wholly owned by OTPP
Source: Company Information
Cadillac Fairview (“CF”) is one of North America’s largest real
estate owners, operators, and developers with expertise in shopping centers, hotels and logistics
— Also owns real estate assets in Brazil, Colombia and Mexico
CF provides extensive real estate development expertise to
generate creative solutions
CF is a wholly owned subsidiary of OTPP
— OTPP and CF have a track record of working closely together
Valued at around $31 billion, CF’s Canadian portfolio includes
— Landmark developments include Toronto-Dominion Centre, CF
Toronto Eaton Centre, CF Pacific Centre, CF Chinook Centre, Tour Deloitte and CF Carrefour Laval Select US Experience:
June 2019: CF formed a strategic partnership with Lincoln
Property Company, the second largest multifamily manager in the US with over 191,000 units under management
— Strategic rationale is to focus on the continued growth of
multifamily property management operations and investment activities across the US
Development Capability Investment Capability Overview
CF’s development activity is primarily focused on redeveloping
existing assets and new development projects
Diversity across different types of development assets yields
predictable and stable returns for its shareholder (OTPP)
Core development markets include Vancouver, Calgary, Toronto
and Montreal in Canada
Select development properties include: CF evaluates investment opportunities in real estate globally on
behalf of its shareholder (OTPP)
The process involves sourcing, underwriting and executing an
extensive range of opportunities across the risk spectrum
Core investment markets include Canada, the US and Latin
America
CF leverages its strategic relationships to actively seek
investment opportunities. Select international partners include:
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Macquarie Capital will act as financial advisor of Gateway Airport Partners, bringing its global expertise in several major global airport transactions, including key North American private airport processes
Extensive North American Private Airport Experience
Chicago Midway Int’l Airport (MDW) Luis Munoz Marin Int’l Airport (SJU) LaGuardia Central Terminal (LGA) Billy Bishop Toronto City Airport (YTZ) Advisor to a bidder in relation to the proposed concession (both processes) Advisor to a bidder in relation to initial concession and advised a bidder in the recent sell- down transaction Advisor to a bidder in relation to the PPP style terminal development Advisor to a bidder in relation to the Billy Bishop Toronto City Airport concession
Landmark Transactions Include:
London City Airport Acquisition 2016 Bristol Airport Divestment 2014 AIX Acquisition of airport portfolio 2013 MAp Airports Asset swap with OTPP 2011 Ferrovial Take-over of BAA plc 2006 Copenhagen Airport Acquisition 2005 Brussels Airport Acquisition 2004 Sydney Airport Acquisition 2002 MAp Airports ASX listing 2002
Airport Advisory Experience
Airport mandates in 19 countries
transaction value
Advised on 71 infrastructure-related transactions worth more than globally in FY18
Financial Advisor for Infrastructure (Inframation) – 2016, 2017 and 2018
General Infrastructure Transport Experience
Pre-eminent advisor in North American transport infrastructure, including recent landmark transactions such as A25 (2018), 407 ETR (2019) and Long Beach Container Terminal (2019)
Advised on virtually every major airport transaction around the world Intimate knowledge of North American airport market through participation in MDW, SJU, LGA and YTZ
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Gateway Airport Partners has extensive global experience in acquiring and managing airports across a range of different jurisdictions
Copenhagen Acquired 2011 30.3 MPPA Brussels Acquired 2011 25.7 MPPA London City Acquired 2016 4.8 MPPA Bristol Acquired 2001 8.7 MPPA Birmingham Acquired 2001 12.5 MPPA Turkey New Istanbul Airport Puerto Rico San Juan Mexico ASUR Portfolio OTPP Airports CAI Advised Airports Hainan Meilan Airport, PRC New castle International Airport, UK
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An overview of OTPP’s current airport holdings is outlined below, highlighting our extensive experience in the sector
Overview
Country UK UK Belgium Denmark UK Ownership 27% 55% 39% 30% 25% Passengers 12.5 m 8.6 m 25.7 m
4.8 m Description 3rd largest UK airport
largest in the UK 9th largest UK airport and 5th largest regional airport Hub airport with catchment
France and Southern Netherlands Hub airport serving Copenhagen, Denmark and the largest serving the Nordic region UK’s leading business airport, with excellent links to London’s financial district Acquisition Year 2001 2001 2011 2011 2016 Partners Consortium of seven West Midlands District Councils N/A Belgian Government, Macquarie Danish Government AIMCo, OMERS, Wren House Runways 1 1 3 3 1 Terminals 1 (2 piers) 1 1 (2 piers) 2 (6 piers) 1 Key Carriers Low Cost / Full Service Low Cost Full Service / Hub Full Service / Hub Full Service / Hub Employees 700 (directly) 6,700 (indirectly) 350 (directly) 3,500 (indirectly) 850 (directly) 24,000 (indirectly) 2,600 (directly) 22,800 (indirectly) 550 (directly) 2,000 (indirectly) Car Parking Spaces 13,000 15,000 17,000 12,000 1000
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The below outlines the Team’s deep experience in managing capital investment effectively with over $2.4 billion of investment since 2013
Overview: Addition of 7 aircraft parking stands, parallel taxiway, extended terminal building, new passenger pier, and associated works. Complexity
the program is significant as all surface areas must be constructed by constructing a platform over the King George V Dock supported on submerged piles down to the dock bed. The work also includes installing the UK’s first digital Air Traffic Control Tower to allow remote ATC handling
aircraft arrivals and departures.
Brussels Airport Connector Building Copenhagen Airport Terminal 2 Airside Lounge Expansion Bristol Airport Multi Storey Car Park London City Terminal and Airfield Expansion Program
Size: Transformational capex program to substantially increase capacity at LCY Overview: 35,000m2 connector building linking the terminal processor to Pier A, central security screening and border control, new baggage reclaim hall, offices, and world class retail and food and beverage
Major
benefit to improve passenger flows and best in class minimum connection times between flights of 35 minutes minimum Status: Completed on time and within scope and budget Size: Similar size, scale and nature as potential projects at STL Timescale: Construction commenced April 2013 and opened March 2015 Overview: 4,000m2 new constructed areas – of these 2,015m2 serve as flow area. Addition of 24 new shops and eateries in a mix of international and national brands including local beer hero “Mikkeller”. A further 1,080m2additional floorspace for storage and other facilities as well as a new kids’ playground Status: Completed on time and within scope and budget Size: Similar size, scale and nature as potential projects at STL Timescale: Construction to completion timelines from 2017 to 2019 Overview: New 1,100 multi-story car park
features enhanced car parking bay technology, helping drivers to easily locate unoccupied spaces, improved internal road design, landscaping and signage. Status: Completed ahead of schedule and within scope and budget Size: Similar size, scale and nature as potential projects at STL Timescale: Rapid construction timescale; commenced November 2018
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All of the Team’s owned and managed airports have won awards and gained global recognition consistently
Europe’s most efficient airport: ATRS (Air Transport Research Society) ranked CPH as Europe’s most efficient airport 13 of the last 15 years
This is the result of continuous effort to improve operations, facility design, new technology and understand how facilities and infrastructure are used by airlines, ground handlers, concessionaires, airport, authorities etc.
Passenger service quality: Optimizing processes, use and design of facilities translate into financial benefit for airport and airlines, and best in class service quality to passengers
SkyTrax continuously ranks CPH among the best airports in the world
Commercial excellence: Efficient facilities and a great commercial offer help to create an excellent travel experience
Commercial activities are an integral part of the operational concept with CPH recognized as a world leader in airport commercial activities and concession management
Airline Marketing and Route Development: CPH recognizes that airports must compete for airline capacity
An increasing focus on the airport’s role in promoting the city, region and country by securing excellent air services led to creation of a dedicated Airline Marketing team recognized by airlines as one of the worlds’ best
Airline marketing and route development: At the 2018 World Routes event in Guangzhou China, won the overall World Routes 2018 Marketing Award, as well as the World Routes Award in the category of 20 to 50 million passengers
Previously won this award in both 2012 and 2014, the first time that an airport has won the award on three separate occasions
Europe’s best airport: In 2016, won the best European airport in the 10-25 million passenger category following investment in the Connector including the world’s first remote screening of cabin baggage on a large scale, which improved the passenger experience (e.g. reduced walking distances, waiting times etc.)
Brussels Airport was also highly commended in 2015
UK’s best airport: In 2018, won the best airport handling more than 10 million passengers a year recognizing excellence and achievement across a whole range of areas, including retail, security, operations, facilities, community relations, environmental awareness, and customer service
Europe’s best airport: In 2015, London City Airport won the best European airport in the below 5 million passenger category
The airport has consistently been recognized by ACI as one of Europe’s leading airports and was also highly commended in 2016 and 2019
Superior service delivery: Passenger service is delivered by a number of parties i.e. airlines, handlers, authorities, airport, etc. CPH encourages all partners to focus on service delivery
For example, CPH is responsible for passenger security screening with average waiting time in 2018 of 3.6 minutes and no passenger waiting longer than 20 minutes
Europe’s best airport: In 2018, won best European airport in the 5-10 million passenger category
Selected for continued investments in infrastructure, staff training and public transport links as well as the new Security Search Facility which improved passenger experience, resulting in its highest ASQ score for all security indicators. Bristol Airport was also highly commended in 2017 and 2016
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OTPP believes that direct governance and oversight drives significant value in its infrastructure investments
OTPP actively works closely with management and other stakeholders across all owned
asset
We ensure partnerships are collaborative and transparent relationships with regular
— Active asset management team — Regular discussions with management both formally in Boards / Committees but also
informally in between meetings
— Board of Directors which is usually comprised of a combination of OTPP senior
investments staff and independent directors
— Specific asset management platforms such as OAIL — Strategic advisors to assist with specific tasks such as CAI
Key governance principles include:
— Alignment of interest with partners at the outset is key — Believe in purposeful governance - People, Structure, Culture and Practice are
essential components to effective corporate governance
Asset management is focused on value-add initiatives at our portfolio companies
including:
Key OTPP Principles
— Board Governance — Strategic objectives — Regulation — Capex projects — Stakeholder relationships — Refinancings — Contract negotiations — Management incentives
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CPH has grown the number of passengers by almost 50% without any major infrastructure expansions and at the same time improved the level of service
Overview
world – maybe the most efficient.
service levels on all the major flows:
— Passengers — Aircrafts — Baggage
globally
— Including self service bag drops, almost 90%
planning/forecasting the usage and allocation of the resources
— Camera detection technology to analyze passenger flow — Information received allows us to have fruitful and data driven
discussions and cooperation with our stakeholders
predict the passenger flows in the future
— A pilot project around baggage allocation is currently on-going
service levels will be the strategy for our operation at STL
Dynamic queue detection Heatmap from busy day in T2, CPH – 5 hours Overview
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SDP / Australia
Fair and transparent process which attracted experienced investors
The NSW Government ran a clearly laid out auction process with set criteria for success, and set up a Steering
Committee with oversight over the process
As a result, this process attracted marque infrastructure investor consortiums, including:
— OTPP & Hastings — IFM — QIC & RREEF — Spark Infrastructure & OMERS
A competitive process yielding
pricing expectations
OTPP and Hastings paid A$2.3 billion for SDP, allowing the NSW Government to repay existing debt on the asset and
generate in excess of A$400 million of net proceeds to reinvest back into new local infrastructure projects
Acquisition raised A$1.6 billion of senior debt which has been refinanced successfully several times since close
Transition complete and consortium continues to deliver quality service and engage with stakeholders
Transitioned asset from government ownership to stand-alone private entity; worked closely with government to
understand what services needed to be transitioned, developed a Transition Services Agreement to provide a blueprint for managing and filling any gaps
Plant did not have its own management team; built a highly capable team from scratch (CEO, CFO, COO) supported
by a highly-effective Board of Directors (investor representatives, independent chair, and other independents with expertise across regulatory, operations, and government relations)
SDP management has developed stakeholder relations plan to engage with the community and continue to
demonstrate the benefits of the plant
Currently actively engaged with the government on a potential expansion of the facility, which would double its size, in
response to Australia’s current drought High quality, critical public infrastructure
Provides a ‘drought insurance policy' to existing Sydney water system which solely relies on rainfall High quality asset designed to turn on when desalinated water is required, and 'mothballed' when dam levels are high
OTPP has a successful track record executing transition plans for public infrastructure to private management. Sydney Desalination Plant is one particular example, outlined below
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A number of parallels can be drawn from OTPP’s acquisition of the Chicago Skyway toll road in 2016
In 2016 OTPP acquired 33% of Chicago Skyway alongside CPPIB
and OMERS
Skyway is a 7.8 mile (12.5 kilometre) toll road that forms a critical
link between downtown Chicago and its south-eastern suburbs
As an essential part of the Chicago road network, it delivers
reliability and time savings for its users in one of the busiest corridors in the U.S
Skyway was privatized by the City of Chicago in 2005 under a 99-
year concession agreement
Skyway offers excellent time value for money in peak congestion
periods, delivering a time savings of ~20-25 minutes on a 45-50 minute trip
Parallels with STL
Significant transaction size
— Acquired in 2016, OTPP co-led this successful public
infrastructure transaction greater than $1 billion
Essential infrastructure asset with high public importance
— As part of the Chicago road network, the asset provides road
connectivity for residents of Chicago and local constituents
Collaborative relationship with public body
— The City of Chicago approved the transaction and were very
supportive
— They have recently held a ribbon-cutting event due to
completion of the canopy rehabilitation project indicating their
Capital put to work to improve facilities / user experience
— Delivered a major canopy rehabilitation project in 2018, which
was completed on time and on budget
— The rehabilitated canopy improved the overall appearance of
the road and also improved signage and functionality allowing for better flow traffic through the plaza
Long term concession based business
— The asset runs under a concession agreement until 2104 — OTPP are comfortable in owning and operating within long
term frameworks / agreements
Project Description
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Gateway Airport Partners have a detailed working knowledge of the PFC charging regime and other key US airport elements
OTPP has experience in various aeronautical and non-aeronautical charging structures globally This global experience is supported by specific US experience within Gateway Airport Partners as follows
— San Juan Airport Tender: CAI and MacCap supported bidders in this process — Midway Airport Tender: CAI and MacCap supported bidders in this process — A specialist FAA / Regulatory law firm will be engaged for the RFP period
Further details around the specific PFC/CFC/AIP programs at SJU and MDW and the involvement of Gateway Airport Partners is provided below As described in the RFQ Gateway Airport Partners experience encompasses a detailed working knowledge of FAA requirements and standards
(including 14 CFR Parts 139, 150 and 161, Order 5190.6B)
Overview
San Juan Airport (SJU)
Capital Improvement Program (CIP) $150m CIP delivering operational improvements, amenities, retail, food and beverage options PFC Program Significant portion of CIP was approved for PFC reimbursement (i.e. >$90m) AIP Program Portion of CIP was FAA grant approved (i.e. >$10m) Gateway Airport Partners Involvement
MacCap – financial advisor to underbidder
CAI – operational advisor to underbidder
Midway Airport (MDW) Process – Discontinued
PFC Program Significant PFC program >$35m per annum at time of transaction (2013) CFC Program >$5m per annum at time of transaction (2013) AIP Program Entitlement grants of approximately $3m per annum at time of transaction (2013) Gateway Airport Partners Involvement
MacCap – financial advisor bidder
CAI – operational advisor to bidder
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Airline and Route Sustainability Optimise Non-Aeronautical Performance
Non-Aero Revenue (Real, £m)
New Routes, New Rotations
Number of cities served
Operational Efficiency Prudent Allocation of Capex Optimise Terminal Space Operating Cost Efficiency
Opex Yield (Real, £/Pax)
Gateway Airport Partners
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There are a number of options that are viable expansion opportunities from a real estate
We view an “Airport City” concept as an excellent opportunity to
expand and increase the offerings of the airport
The concept revolves around an airport centred commercial core
and outlying corridors and clusters of aviation linked and non- aviation linked business and associated development
This ultimately transforms from primarily air transport
infrastructure to multimodal, multi-functional enterprises generating commercial development opportunities
— Airports as corporate headquarter due to excellent surface
connectivity, with extensive flight networks
— Professional, medical (life sciences) and information and
communication businesses
— Hotels, leisure, recreation and entertainment complexes, brand
showrooms, exhibition and convention centres
Brussels Airport has developed this concept through OTPP
— Property development zones including economic centre
development with multi modal hub, HQ offices, etc.
— Deloitte HQ for 2,000 staff as first major tenant — Cargo and ancillary development plans for c. 4.5m ft2
The opportunity for STL
St Louis Airport already has a number of big companies located
close to the airport, particularly Boeing
A number of airport and non-airport development sites have been
identified for future development, clustering indicated demand for real estate close to the airport
Through our development partner, Cadillac Fairview, we have a
best in class firm to consult and guide us on the future developments which would be viable at St Louis Airport
Cadillac Fairview operates across many asset classes as outlined
Overview
Office Retail Mixed Use Logistics Hotel Operating platforms
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Gateway Airport Partners has experience growing airport cargo operations that is directly relevant to STL
CPH Cargo Overview BRUCargo Overview
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The Team has excellent and recent experience in engaging with local communities and view this as an extremely important aspect when considering the overall airport strategy
Employee and Public Engagement Environmental Initiatives Commitment to the Local Community
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OTPP has significant capital for infrastructure development and is in active deployment mode
Recent Relevant Transactions
Chicago Skyway Toll Road
— $2.8 billion EV — OTPP 33% ownership
Sydney Desalination Plant
— A$2.3 billion EV — OTPP 50% ownership
High Speed One Rail
— £2.1 billion — OTPP 50% ownership
OTPP Overview
OTPP is one of the world’s largest pension plan managers with net assets of over $150
billion
— $13 billion infrastructure investment portfolio across airports, toll roads, water, gas and
electricity utilities, renewable power generation, container terminals and a desalination plant
OTPP administers and invests the pensions of 327,000 retired and unionized working
teachers in the Province of Ontario
Since 2001, OTPP has actively invested in airport assets and currently owns and manages
its investments in five airports through its airport investment platform OAIL
— Includes Copenhagen, Brussels, Birmingham, Bristol and London City airports — In 2018, the OTPP airport portfolio generated $1.8 billion revenue and $973 million
EBITDA
18-year history of committing equity in excess of $1 billion for large-scale infrastructure
transactions
Offices in Toronto, London and Hong Kong Back-to-back winner of Infrastructure Investor’s “Institutional Investor of the Year” (2017 &
2018)
Credit Rating Aa1 AA+ AAA
Other Transactions > $1bn EV
London City Airport Brussels Airport Copenhagen Airport Birmingham Airport GCT Global Container Terminals Bristol Airport
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Gateway Airport Partners, through OTPP and financial advisor MacCap, has experience in executing large, complex transactions and successfully structuring ‘bankable’ deals
Process Considerations Experience – OTPP
Select Financing Packages >$1bn EV
Experience – MacCap
Select Financing Packages >$1bn EV
Chicago Skyway Toll Road (Bank and Bond) London City Airport (Bank) Sydney Desalination Plant (Bank) Indiana Toll Road (Bank) Port of Botany (Bank) Sydney Desalination Plant (Bank) High Speed Rail 1 (Bank) GCT Global Container Terminals (Bank) Long Beach Container Terminal (Bank) Indiana Toll Road (Bond) London City Airport (Bank) Sydney Airport (Bank and Bond) Elizabeth River Crossing (Tax Exempt
Bond and TIFIA)
financing structure
with certainty in its ability to close
best pricing and terms
— Commercial Banks: Banks’ due diligence, credit approval and documentation
process are expected to take 3 – 4 months
— Capital Markets: The process to obtain commitments from investors for a private
placement issuance will be primarily driven by discussions with rating agencies
structure, the asset risk profile and business plan development
the Airline Use Agreement (AUA)
— Good visibility, as soon as feasible, on the key terms of the transaction documents to
be signed with the authority and the airlines will be crucial 1 Develop commercial structures 2 Rigorous diligence and testing 3 Competitive multi-track process 4 Finalize and execute with certainty
Approach:
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Gateway Airport Partners are mobilized and ready to pursue the transaction, however a carefully considered process design is key to ensuring the City’s objectives are achieved
Key Considerations
Timing / process Competitive dynamic Access Due Diligence Financing
Need to ensure satisfactory period (12-14 weeks) after reducing bidders to conduct diligence, obtain
credit rating and raise financing and obtain final investment committee approvals
Q&A process is important – expect high question volume (response period / quality impacts value) We understand the desire to maximize competitive tension for the bid – however it is unlikely that
bidders will incur significant diligence costs until the group is reduced (well below 10-12 bidders)
Reducing the field early provides time for remaining bidders to develop value maximizing proposals There are a large number of stakeholders given the size and publicity of the transaction Access to all key stakeholders is important to ensure alignment of strategy and approach to provide
bidders with a high degree of certainty around business plan implementation
Sufficient due diligence will need to be carried out, with access to management and advisors to ensure
the business plan workstream (amongst others) is as streamlined as possible
Typical VDR and Q&A is expected, with access to advisers and other key stakeholders also important Realistically commercial banks have a limit on the number of trees they can run to support bidders A large number of bidders developing binding financing solutions will impact the ability of bidders to
achieve the most competitive terms which in turn reduces the value provided to the City
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We recognize the importance of STL to the City of St Louis and the surrounding community and we bring key attributes to ensure a successful outcome
You can have confidence in who we are
We are long term investors We are well capitalized with “deep pockets” We are looking to generate sustainable value for the teachers who entrust us with their retirement
1 You can trust us as stewards of your airport
We have a long and successful history of delivering best-in-class service at our airports We have a track record of creating significant value for all airport stakeholders
2 You can rely on us as a partner
We work hand-in-glove with government entities at all levels at our airports We proactively work with airlines to understand their business, operations, route performance and
enhance the customer experience 3 You can expect a seamless transition to private management
We know what is required for effective transition at airports We know how to execute so that nothing falls through the cracks
4 You can count on us to engage
stakeholders
Whether at OTPP or the airports we have invested in, we live our values and give back to our
community 5
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